The impact of private equity on firms׳ patenting activity
The paper analyses the impact of private equity (PE) backed leveraged buyouts (LBOs) on innovative output (patenting). Using a sample of 407 UK deals we find that LBOs have a positive causal effect on patent stock and quality-adjusted patent stock. Our results imply a 6% increase in quality-adjusted...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Published: |
Elsevier
2015
|
| Subjects: | |
| Online Access: | https://eprints.nottingham.ac.uk/32118/ |
| _version_ | 1848794338639740928 |
|---|---|
| author | Amess, Kevin Stiebale, Joel Wright, Mike |
| author_facet | Amess, Kevin Stiebale, Joel Wright, Mike |
| author_sort | Amess, Kevin |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | The paper analyses the impact of private equity (PE) backed leveraged buyouts (LBOs) on innovative output (patenting). Using a sample of 407 UK deals we find that LBOs have a positive causal effect on patent stock and quality-adjusted patent stock. Our results imply a 6% increase in quality-adjusted patent stock three years after the deal. The increase in innovative activity is concentrated among private-to-private transactions with a 14% increase in the quality-adjusted patent stock. We also find evidence suggesting that PE firms facilitate the relaxation of financial constraints. In sum, our findings suggest that PE firms do not promote short-term cost-cutting at the expense of entrepreneurial investment opportunities with a long-term pay-off. |
| first_indexed | 2025-11-14T19:14:37Z |
| format | Article |
| id | nottingham-32118 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:14:37Z |
| publishDate | 2015 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-321182020-05-04T17:17:14Z https://eprints.nottingham.ac.uk/32118/ The impact of private equity on firms׳ patenting activity Amess, Kevin Stiebale, Joel Wright, Mike The paper analyses the impact of private equity (PE) backed leveraged buyouts (LBOs) on innovative output (patenting). Using a sample of 407 UK deals we find that LBOs have a positive causal effect on patent stock and quality-adjusted patent stock. Our results imply a 6% increase in quality-adjusted patent stock three years after the deal. The increase in innovative activity is concentrated among private-to-private transactions with a 14% increase in the quality-adjusted patent stock. We also find evidence suggesting that PE firms facilitate the relaxation of financial constraints. In sum, our findings suggest that PE firms do not promote short-term cost-cutting at the expense of entrepreneurial investment opportunities with a long-term pay-off. Elsevier 2015-09-14 Article PeerReviewed Amess, Kevin, Stiebale, Joel and Wright, Mike (2015) The impact of private equity on firms׳ patenting activity. European Economic Review, 86 . pp. 147-160. ISSN 0014-2921 Private equity; Leveraged buyout; Entrepreneurial buyouts; Innovation http://www.sciencedirect.com/science/article/pii/S0014292115001300 doi:10.1016/j.euroecorev.2015.08.013 doi:10.1016/j.euroecorev.2015.08.013 |
| spellingShingle | Private equity; Leveraged buyout; Entrepreneurial buyouts; Innovation Amess, Kevin Stiebale, Joel Wright, Mike The impact of private equity on firms׳ patenting activity |
| title | The impact of private equity on firms׳ patenting activity |
| title_full | The impact of private equity on firms׳ patenting activity |
| title_fullStr | The impact of private equity on firms׳ patenting activity |
| title_full_unstemmed | The impact of private equity on firms׳ patenting activity |
| title_short | The impact of private equity on firms׳ patenting activity |
| title_sort | impact of private equity on firms׳ patenting activity |
| topic | Private equity; Leveraged buyout; Entrepreneurial buyouts; Innovation |
| url | https://eprints.nottingham.ac.uk/32118/ https://eprints.nottingham.ac.uk/32118/ https://eprints.nottingham.ac.uk/32118/ |